Many Bitcoin, Cryptocurrency Owners Not Reporting Holdings On Their Taxes, Report Says

(CBS Local) — Last year was a big year for Bitcoin as the online currency skyrocketed to nearly $20,000 in value. However, a new report claims that many investors are failing to report the big gains on their taxes.

While the value has dropped dramatically in 2018, investors are still on the hook for last year’s cryptocurrency transactions. According to Credit Karma, less than 100 people out of 250,000 who have filed their 2017 taxes through the company have reported buying cryptocurrency. That number falls far short of the 57 percent of Americans polled who said they had cashed in on the investment craze last year.

“Given the popularity of bitcoin and cryptocurrencies in 2017, we’d expect more people to be reporting,” Jagjit Chawla of Credit Karma Tax told Reuters.

According to Fortune, the IRS has received cryptocurrency tax information from just 0.04 percent of filers so far however, seven percent of U.S. taxpayers are believed to own Bitcoin or other digital currencies. “The IRS is going to come after people. People are making real money now. So the IRS isn’t stupid,” hedge fund manager Mike Novogratz said.

The IRS has already come after cryptocurrency exchanges for not coming clean on their investments. The agency successfully sued Coinbase to reveal its client lists after only 802 Bitcoin buyers reported their gains in 2015. If caught not paying up on Bitcoins investments, the government’s tax collectors can not only send taxpayers a bill but also add penalties and interest charges to the amount owed.